diff --git a/packages/next-swc/crates/next-api/src/app.rs b/packages/next-swc/crates/next-api/src/app.rs
index 84e0181e8a..b66d15cb72 100644
--- a/packages/next-swc/crates/next-api/src/app.rs
+++ b/packages/next-swc/crates/next-api/src/app.rs
@@ -59,7 +59,7 @@ use turbopack_binding::{
         turbopack::{
             module_options::ModuleOptionsContext,
             resolve_options_context::ResolveOptionsContext,
-            transition::{ContextTransition, FullContextTransition},
+            transition::{ContextTransition, FullContextTransition, Transition},
             ModuleAssetContext,
         },
     },
@@ -118,7 +118,7 @@ impl AppProject {
     }
 }
 
-const ECMASCRIPT_CLIENT_TRANSITION_NAME: &str = "next-ecmascript-client-reference";
+pub(crate) const ECMASCRIPT_CLIENT_TRANSITION_NAME: &str = "next-ecmascript-client-reference";
 
 #[turbo_tasks::value_impl]
 impl AppProject {
@@ -166,7 +166,7 @@ impl AppProject {
     }
 
     #[turbo_tasks::function]
-    fn client_transition_name(self: Vc<Self>) -> Vc<RcStr> {
+    pub(crate) fn client_transition_name(self: Vc<Self>) -> Vc<RcStr> {
         Vc::cell(ECMASCRIPT_CLIENT_TRANSITION_NAME.into())
     }
 
@@ -270,15 +270,28 @@ impl AppProject {
         ))
     }
 
+    #[turbo_tasks::function]
+    pub fn client_reference_transition(self: Vc<Self>) -> Vc<Box<dyn Transition>> {
+        Vc::upcast(NextEcmascriptClientReferenceTransition::new(
+            Vc::upcast(self.client_transition()),
+            self.ssr_transition(),
+        ))
+    }
+
+    #[turbo_tasks::function]
+    pub fn edge_client_reference_transition(self: Vc<Self>) -> Vc<Box<dyn Transition>> {
+        Vc::upcast(NextEcmascriptClientReferenceTransition::new(
+            Vc::upcast(self.client_transition()),
+            self.edge_ssr_transition(),
+        ))
+    }
+
     #[turbo_tasks::function]
     fn rsc_module_context(self: Vc<Self>) -> Vc<ModuleAssetContext> {
         let transitions = [
             (
                 ECMASCRIPT_CLIENT_TRANSITION_NAME.into(),
-                Vc::upcast(NextEcmascriptClientReferenceTransition::new(
-                    Vc::upcast(self.client_transition()),
-                    self.ssr_transition(),
-                )),
+                self.client_reference_transition(),
             ),
             (
                 "next-dynamic".into(),
@@ -305,10 +318,7 @@ impl AppProject {
         let transitions = [
             (
                 ECMASCRIPT_CLIENT_TRANSITION_NAME.into(),
-                Vc::upcast(NextEcmascriptClientReferenceTransition::new(
-                    Vc::upcast(self.client_transition()),
-                    self.edge_ssr_transition(),
-                )),
+                self.edge_client_reference_transition(),
             ),
             (
                 "next-dynamic".into(),
@@ -338,10 +348,7 @@ impl AppProject {
         let transitions = [
             (
                 ECMASCRIPT_CLIENT_TRANSITION_NAME.into(),
-                Vc::upcast(NextEcmascriptClientReferenceTransition::new(
-                    Vc::upcast(self.client_transition()),
-                    self.ssr_transition(),
-                )),
+                self.client_reference_transition(),
             ),
             (
                 "next-dynamic".into(),
@@ -369,10 +376,7 @@ impl AppProject {
         let transitions = [
             (
                 ECMASCRIPT_CLIENT_TRANSITION_NAME.into(),
-                Vc::upcast(NextEcmascriptClientReferenceTransition::new(
-                    Vc::upcast(self.client_transition()),
-                    self.edge_ssr_transition(),
-                )),
+                self.edge_client_reference_transition(),
             ),
             (
                 "next-dynamic".into(),
diff --git a/packages/next-swc/crates/next-api/src/instrumentation.rs b/packages/next-swc/crates/next-api/src/instrumentation.rs
index c229ba9632..5f657e1ccc 100644
--- a/packages/next-swc/crates/next-api/src/instrumentation.rs
+++ b/packages/next-swc/crates/next-api/src/instrumentation.rs
@@ -6,9 +6,9 @@ use next_core::{
     next_server::{get_server_runtime_entries, ServerContextType},
 };
 use tracing::Instrument;
-use turbo_tasks::{Completion, Value, Vc};
+use turbo_tasks::{Completion, RcStr, Value, Vc};
 use turbopack_binding::{
-    turbo::tasks_fs::{File, FileContent},
+    turbo::tasks_fs::{File, FileContent, FileSystemPath},
     turbopack::{
         core::{
             asset::AssetContent,
@@ -41,6 +41,9 @@ pub struct InstrumentationEndpoint {
     context: Vc<Box<dyn AssetContext>>,
     source: Vc<Box<dyn Source>>,
     is_edge: bool,
+
+    app_dir: Option<Vc<FileSystemPath>>,
+    ecmascript_client_reference_transition_name: Option<Vc<RcStr>>,
 }
 
 #[turbo_tasks::value_impl]
@@ -51,12 +54,16 @@ impl InstrumentationEndpoint {
         context: Vc<Box<dyn AssetContext>>,
         source: Vc<Box<dyn Source>>,
         is_edge: bool,
+        app_dir: Option<Vc<FileSystemPath>>,
+        ecmascript_client_reference_transition_name: Option<Vc<RcStr>>,
     ) -> Vc<Self> {
         Self {
             project,
             context,
             source,
             is_edge,
+            app_dir,
+            ecmascript_client_reference_transition_name,
         }
         .cell()
     }
@@ -79,7 +86,11 @@ impl InstrumentationEndpoint {
         );
 
         let mut evaluatable_assets = get_server_runtime_entries(
-            Value::new(ServerContextType::Middleware),
+            Value::new(ServerContextType::Instrumentation {
+                app_dir: self.app_dir,
+                ecmascript_client_reference_transition_name: self
+                    .ecmascript_client_reference_transition_name,
+            }),
             self.project.next_mode(),
         )
         .resolve_entries(self.context)
@@ -131,7 +142,11 @@ impl InstrumentationEndpoint {
                     .join("server/instrumentation.js".into()),
                 module,
                 get_server_runtime_entries(
-                    Value::new(ServerContextType::Instrumentation),
+                    Value::new(ServerContextType::Instrumentation {
+                        app_dir: self.app_dir,
+                        ecmascript_client_reference_transition_name: self
+                            .ecmascript_client_reference_transition_name,
+                    }),
                     self.project.next_mode(),
                 )
                 .resolve_entries(self.context),
diff --git a/packages/next-swc/crates/next-api/src/middleware.rs b/packages/next-swc/crates/next-api/src/middleware.rs
index d2df5a768c..b7909e7bb2 100644
--- a/packages/next-swc/crates/next-api/src/middleware.rs
+++ b/packages/next-swc/crates/next-api/src/middleware.rs
@@ -8,9 +8,9 @@ use next_core::{
     util::{parse_config_from_source, MiddlewareMatcherKind},
 };
 use tracing::Instrument;
-use turbo_tasks::{Completion, Value, Vc};
+use turbo_tasks::{Completion, RcStr, Value, Vc};
 use turbopack_binding::{
-    turbo::tasks_fs::{File, FileContent},
+    turbo::tasks_fs::{File, FileContent, FileSystemPath},
     turbopack::{
         core::{
             asset::AssetContent,
@@ -40,6 +40,8 @@ pub struct MiddlewareEndpoint {
     project: Vc<Project>,
     context: Vc<Box<dyn AssetContext>>,
     source: Vc<Box<dyn Source>>,
+    app_dir: Option<Vc<FileSystemPath>>,
+    ecmascript_client_reference_transition_name: Option<Vc<RcStr>>,
 }
 
 #[turbo_tasks::value_impl]
@@ -49,11 +51,15 @@ impl MiddlewareEndpoint {
         project: Vc<Project>,
         context: Vc<Box<dyn AssetContext>>,
         source: Vc<Box<dyn Source>>,
+        app_dir: Option<Vc<FileSystemPath>>,
+        ecmascript_client_reference_transition_name: Option<Vc<RcStr>>,
     ) -> Vc<Self> {
         Self {
             project,
             context,
             source,
+            app_dir,
+            ecmascript_client_reference_transition_name,
         }
         .cell()
     }
@@ -79,7 +85,11 @@ impl MiddlewareEndpoint {
         );
 
         let mut evaluatable_assets = get_server_runtime_entries(
-            Value::new(ServerContextType::Middleware),
+            Value::new(ServerContextType::Middleware {
+                app_dir: self.app_dir,
+                ecmascript_client_reference_transition_name: self
+                    .ecmascript_client_reference_transition_name,
+            }),
             self.project.next_mode(),
         )
         .resolve_entries(self.context)
diff --git a/packages/next-swc/crates/next-api/src/project.rs b/packages/next-swc/crates/next-api/src/project.rs
index 797a3d52a4..61e7df6d8d 100644
--- a/packages/next-swc/crates/next-api/src/project.rs
+++ b/packages/next-swc/crates/next-api/src/project.rs
@@ -57,7 +57,7 @@ use turbopack_binding::{
 };
 
 use crate::{
-    app::{AppProject, OptionAppProject},
+    app::{AppProject, OptionAppProject, ECMASCRIPT_CLIENT_TRANSITION_NAME},
     build,
     entrypoints::Entrypoints,
     instrumentation::InstrumentationEndpoint,
@@ -875,27 +875,49 @@ impl Project {
     }
 
     #[turbo_tasks::function]
-    fn middleware_context(self: Vc<Self>) -> Vc<Box<dyn AssetContext>> {
-        Vc::upcast(ModuleAssetContext::new(
-            Default::default(),
+    async fn middleware_context(self: Vc<Self>) -> Result<Vc<Box<dyn AssetContext>>> {
+        let mut transitions = vec![];
+
+        let app_dir = *find_app_dir(self.project_path()).await?;
+        let app_project = *self.app_project().await?;
+
+        let ecmascript_client_reference_transition_name = app_project
+            .as_ref()
+            .map(|app_project| app_project.client_transition_name());
+
+        if let Some(app_project) = app_project {
+            transitions.push((
+                ECMASCRIPT_CLIENT_TRANSITION_NAME.into(),
+                app_project.edge_client_reference_transition(),
+            ));
+        }
+
+        Ok(Vc::upcast(ModuleAssetContext::new(
+            Vc::cell(transitions.into_iter().collect()),
             self.edge_compile_time_info(),
             get_server_module_options_context(
                 self.project_path(),
                 self.execution_context(),
-                Value::new(ServerContextType::Middleware),
+                Value::new(ServerContextType::Middleware {
+                    app_dir,
+                    ecmascript_client_reference_transition_name,
+                }),
                 self.next_mode(),
                 self.next_config(),
                 NextRuntime::Edge,
             ),
             get_edge_resolve_options_context(
                 self.project_path(),
-                Value::new(ServerContextType::Middleware),
+                Value::new(ServerContextType::Middleware {
+                    app_dir,
+                    ecmascript_client_reference_transition_name,
+                }),
                 self.next_mode(),
                 self.next_config(),
                 self.execution_context(),
             ),
             Vc::cell("middleware".into()),
-        ))
+        )))
     }
 
     #[turbo_tasks::function]
@@ -903,48 +925,139 @@ impl Project {
         self: Vc<Self>,
         source: Vc<Box<dyn Source>>,
     ) -> Result<Vc<MiddlewareEndpoint>> {
+        let app_dir = *find_app_dir(self.project_path()).await?;
+        let ecmascript_client_reference_transition_name = (*self.app_project().await?)
+            .as_ref()
+            .map(|app_project| app_project.client_transition_name());
+
         let context = self.middleware_context();
 
-        Ok(MiddlewareEndpoint::new(self, context, source))
+        Ok(MiddlewareEndpoint::new(
+            self,
+            context,
+            source,
+            app_dir,
+            ecmascript_client_reference_transition_name,
+        ))
     }
 
     #[turbo_tasks::function]
-    fn node_instrumentation_context(self: Vc<Self>) -> Vc<Box<dyn AssetContext>> {
-        Vc::upcast(ModuleAssetContext::new(
-            Default::default(),
+    async fn node_instrumentation_context(self: Vc<Self>) -> Result<Vc<Box<dyn AssetContext>>> {
+        let mut transitions = vec![];
+
+        let app_dir = *find_app_dir(self.project_path()).await?;
+        let app_project = &*self.app_project().await?;
+
+        let ecmascript_client_reference_transition_name = app_project
+            .as_ref()
+            .map(|app_project| app_project.client_transition_name());
+
+        if let Some(app_project) = app_project {
+            transitions.push((
+                ECMASCRIPT_CLIENT_TRANSITION_NAME.into(),
+                app_project.client_reference_transition(),
+            ));
+        }
+
+        Ok(Vc::upcast(ModuleAssetContext::new(
+            Vc::cell(transitions.into_iter().collect()),
             self.server_compile_time_info(),
             get_server_module_options_context(
                 self.project_path(),
                 self.execution_context(),
-                Value::new(ServerContextType::Instrumentation),
+                Value::new(ServerContextType::Instrumentation {
+                    app_dir,
+                    ecmascript_client_reference_transition_name,
+                }),
                 self.next_mode(),
                 self.next_config(),
                 NextRuntime::NodeJs,
             ),
             get_server_resolve_options_context(
                 self.project_path(),
-                Value::new(ServerContextType::Instrumentation),
+                Value::new(ServerContextType::Instrumentation {
+                    app_dir,
+                    ecmascript_client_reference_transition_name,
+                }),
+                self.next_mode(),
+                self.next_config(),
+                self.execution_context(),
+            ),
+            Vc::cell("instrumentation-edge".into()),
+        )))
+    }
+
+    #[turbo_tasks::function]
+    async fn edge_instrumentation_context(self: Vc<Self>) -> Result<Vc<Box<dyn AssetContext>>> {
+        let mut transitions = vec![];
+
+        let app_dir = *find_app_dir(self.project_path()).await?;
+        let app_project = &*self.app_project().await?;
+
+        let ecmascript_client_reference_transition_name = app_project
+            .as_ref()
+            .map(|app_project| app_project.client_transition_name());
+
+        if let Some(app_project) = app_project {
+            transitions.push((
+                ECMASCRIPT_CLIENT_TRANSITION_NAME.into(),
+                app_project.edge_client_reference_transition(),
+            ));
+        }
+
+        Ok(Vc::upcast(ModuleAssetContext::new(
+            Vc::cell(transitions.into_iter().collect()),
+            self.edge_compile_time_info(),
+            get_server_module_options_context(
+                self.project_path(),
+                self.execution_context(),
+                Value::new(ServerContextType::Instrumentation {
+                    app_dir,
+                    ecmascript_client_reference_transition_name,
+                }),
+                self.next_mode(),
+                self.next_config(),
+                NextRuntime::Edge,
+            ),
+            get_edge_resolve_options_context(
+                self.project_path(),
+                Value::new(ServerContextType::Instrumentation {
+                    app_dir,
+                    ecmascript_client_reference_transition_name,
+                }),
                 self.next_mode(),
                 self.next_config(),
                 self.execution_context(),
             ),
             Vc::cell("instrumentation".into()),
-        ))
+        )))
     }
 
     #[turbo_tasks::function]
-    fn instrumentation_endpoint(
+    async fn instrumentation_endpoint(
         self: Vc<Self>,
         source: Vc<Box<dyn Source>>,
         is_edge: bool,
-    ) -> Vc<InstrumentationEndpoint> {
+    ) -> Result<Vc<InstrumentationEndpoint>> {
+        let app_dir = *find_app_dir(self.project_path()).await?;
+        let ecmascript_client_reference_transition_name = (*self.app_project().await?)
+            .as_ref()
+            .map(|app_project| app_project.client_transition_name());
+
         let context = if is_edge {
-            self.middleware_context()
+            self.edge_instrumentation_context()
         } else {
             self.node_instrumentation_context()
         };
 
-        InstrumentationEndpoint::new(self, context, source, is_edge)
+        Ok(InstrumentationEndpoint::new(
+            self,
+            context,
+            source,
+            is_edge,
+            app_dir,
+            ecmascript_client_reference_transition_name,
+        ))
     }
 
     #[turbo_tasks::function]
diff --git a/packages/next-swc/crates/next-core/src/next_edge/context.rs b/packages/next-swc/crates/next-core/src/next_edge/context.rs
index 85547a8809..1b35e8f025 100644
--- a/packages/next-swc/crates/next-core/src/next_edge/context.rs
+++ b/packages/next-swc/crates/next-core/src/next_edge/context.rs
@@ -98,7 +98,7 @@ pub async fn get_edge_resolve_options_context(
     let next_edge_import_map =
         get_next_edge_import_map(project_path, ty, next_config, execution_context);
 
-    let ty = ty.into_value();
+    let ty: ServerContextType = ty.into_value();
 
     let mut before_resolve_plugins = vec![Vc::upcast(ModuleFeatureReportResolvePlugin::new(
         project_path,
@@ -110,7 +110,7 @@ pub async fn get_edge_resolve_options_context(
             | ServerContextType::AppRSC { .. }
     ) {
         before_resolve_plugins.push(Vc::upcast(NextFontLocalResolvePlugin::new(project_path)));
-    }
+    };
 
     if matches!(
         ty,
@@ -118,7 +118,7 @@ pub async fn get_edge_resolve_options_context(
             | ServerContextType::AppRoute { .. }
             | ServerContextType::PagesData { .. }
             | ServerContextType::Middleware { .. }
-            | ServerContextType::Instrumentation
+            | ServerContextType::Instrumentation { .. }
     ) {
         before_resolve_plugins.push(Vc::upcast(get_invalid_client_only_resolve_plugin(
             project_path,
diff --git a/packages/next-swc/crates/next-core/src/next_import_map.rs b/packages/next-swc/crates/next-core/src/next_import_map.rs
index 27cc8b0216..5044ccee27 100644
--- a/packages/next-swc/crates/next-core/src/next_import_map.rs
+++ b/packages/next-swc/crates/next-core/src/next_import_map.rs
@@ -345,7 +345,7 @@ pub async fn get_next_server_import_map(
                 request_to_import_mapping(project_path, "next/dist/shared/lib/app-dynamic"),
             );
         }
-        ServerContextType::Middleware | ServerContextType::Instrumentation => {}
+        ServerContextType::Middleware { .. } | ServerContextType::Instrumentation { .. } => {}
     }
 
     insert_next_server_special_aliases(
@@ -433,7 +433,9 @@ pub async fn get_next_edge_import_map(
     match ty {
         ServerContextType::Pages { .. }
         | ServerContextType::PagesData { .. }
-        | ServerContextType::PagesApi { .. } => {}
+        | ServerContextType::PagesApi { .. }
+        | ServerContextType::Middleware { .. }
+        | ServerContextType::Instrumentation { .. } => {}
         ServerContextType::AppSSR { .. }
         | ServerContextType::AppRSC { .. }
         | ServerContextType::AppRoute { .. } => {
@@ -446,7 +448,6 @@ pub async fn get_next_edge_import_map(
                 request_to_import_mapping(project_path, "next/dist/shared/lib/app-dynamic"),
             );
         }
-        ServerContextType::Middleware | ServerContextType::Instrumentation => {}
     }
 
     insert_next_server_special_aliases(
@@ -465,6 +466,7 @@ pub async fn get_next_edge_import_map(
         | ServerContextType::AppRSC { .. }
         | ServerContextType::AppRoute { .. }
         | ServerContextType::Middleware { .. }
+        | ServerContextType::Instrumentation { .. }
         | ServerContextType::Pages { .. }
         | ServerContextType::PagesData { .. }
         | ServerContextType::PagesApi { .. } => {
@@ -474,7 +476,6 @@ pub async fn get_next_edge_import_map(
                 execution_context,
             );
         }
-        _ => {}
     }
 
     Ok(import_map.cell())
@@ -576,10 +577,9 @@ async fn insert_next_server_special_aliases(
 
             rsc_aliases(import_map, project_path, ty, runtime, next_config).await?;
         }
-        ServerContextType::Middleware => {
+        ServerContextType::Middleware { .. } | ServerContextType::Instrumentation { .. } => {
             rsc_aliases(import_map, project_path, ty, runtime, next_config).await?;
         }
-        ServerContextType::Instrumentation => {}
     }
 
     // see https://github.com/vercel/next.js/blob/8013ef7372fc545d49dbd060461224ceb563b454/packages/next/src/build/webpack-config.ts#L1449-L1531
@@ -605,7 +605,7 @@ async fn insert_next_server_special_aliases(
         | ServerContextType::AppRSC { .. }
         | ServerContextType::AppRoute { .. }
         | ServerContextType::Middleware { .. }
-        | ServerContextType::Instrumentation => {
+        | ServerContextType::Instrumentation { .. } => {
             insert_exact_alias_map(
                 import_map,
                 project_path,
@@ -650,19 +650,29 @@ async fn rsc_aliases(
     let taint = *next_config.enable_taint().await?;
     let react_channel = if ppr || taint { "-experimental" } else { "" };
 
-    let mut alias = indexmap! {
-        "react" => format!("next/dist/compiled/react{react_channel}"),
-        "react-dom" => format!("next/dist/compiled/react-dom{react_channel}"),
-        "react/jsx-runtime" => format!("next/dist/compiled/react{react_channel}/jsx-runtime"),
-        "react/jsx-dev-runtime" => format!("next/dist/compiled/react{react_channel}/jsx-dev-runtime"),
-        "react/compiler-runtime" => format!("next/dist/compiled/react{react_channel}/compiler-runtime"),
-        "react-dom/client" => format!("next/dist/compiled/react-dom{react_channel}/client"),
-        "react-dom/static" => format!("next/dist/compiled/react-dom-experimental/static"),
-        "react-dom/static.edge" => format!("next/dist/compiled/react-dom-experimental/static.edge"),
-        "react-dom/static.browser" => format!("next/dist/compiled/react-dom-experimental/static.browser"),
-        "react-dom/server" => format!("next/dist/compiled/react-dom{react_channel}/server"),
-        "react-dom/server.edge" => format!("next/dist/compiled/react-dom{react_channel}/server.edge"),
-        "react-dom/server.browser" => format!("next/dist/compiled/react-dom{react_channel}/server.browser"),
+    let mut alias = IndexMap::new();
+    if matches!(
+        ty,
+        ServerContextType::AppSSR { .. }
+            | ServerContextType::AppRSC { .. }
+            | ServerContextType::AppRoute { .. }
+    ) {
+        alias.extend(indexmap! {
+            "react" => format!("next/dist/compiled/react{react_channel}"),
+            "react-dom" => format!("next/dist/compiled/react-dom{react_channel}"),
+            "react/jsx-runtime" => format!("next/dist/compiled/react{react_channel}/jsx-runtime"),
+            "react/jsx-dev-runtime" => format!("next/dist/compiled/react{react_channel}/jsx-dev-runtime"),
+            "react/compiler-runtime" => format!("next/dist/compiled/react{react_channel}/compiler-runtime"),
+            "react-dom/client" => format!("next/dist/compiled/react-dom{react_channel}/client"),
+            "react-dom/static" => format!("next/dist/compiled/react-dom-experimental/static"),
+            "react-dom/static.edge" => format!("next/dist/compiled/react-dom-experimental/static.edge"),
+            "react-dom/static.browser" => format!("next/dist/compiled/react-dom-experimental/static.browser"),
+            "react-dom/server" => format!("next/dist/compiled/react-dom{react_channel}/server"),
+            "react-dom/server.edge" => format!("next/dist/compiled/react-dom{react_channel}/server.edge"),
+            "react-dom/server.browser" => format!("next/dist/compiled/react-dom{react_channel}/server.browser"),
+        });
+    }
+    alias.extend(indexmap! {
         "react-server-dom-webpack/client" => format!("next/dist/compiled/react-server-dom-turbopack{react_channel}/client"),
         "react-server-dom-webpack/client.edge" => format!("next/dist/compiled/react-server-dom-turbopack{react_channel}/client.edge"),
         "react-server-dom-webpack/server.edge" => format!("next/dist/compiled/react-server-dom-turbopack{react_channel}/server.edge"),
@@ -671,7 +681,7 @@ async fn rsc_aliases(
         "react-server-dom-turbopack/client.edge" => format!("next/dist/compiled/react-server-dom-turbopack{react_channel}/client.edge"),
         "react-server-dom-turbopack/server.edge" => format!("next/dist/compiled/react-server-dom-turbopack{react_channel}/server.edge"),
         "react-server-dom-turbopack/server.node" => format!("next/dist/compiled/react-server-dom-turbopack{react_channel}/server.node"),
-    };
+    });
 
     if runtime == NextRuntime::NodeJs {
         match ty {
@@ -684,9 +694,12 @@ async fn rsc_aliases(
                     "react-dom" => format!("next/dist/server/route-modules/app-page/vendored/ssr/react-dom"),
                     "react-server-dom-webpack/client.edge" => format!("next/dist/server/route-modules/app-page/vendored/ssr/react-server-dom-turbopack-client-edge"),
                     "react-server-dom-turbopack/client.edge" => format!("next/dist/server/route-modules/app-page/vendored/ssr/react-server-dom-turbopack-client-edge"),
-                })
+                });
             }
-            ServerContextType::AppRSC { .. } | ServerContextType::AppRoute { .. } => {
+            ServerContextType::AppRSC { .. }
+            | ServerContextType::AppRoute { .. }
+            | ServerContextType::Middleware { .. }
+            | ServerContextType::Instrumentation { .. } => {
                 alias.extend(indexmap! {
                     "react/jsx-runtime" => format!("next/dist/server/route-modules/app-page/vendored/rsc/react-jsx-runtime"),
                     "react/jsx-dev-runtime" => format!("next/dist/server/route-modules/app-page/vendored/rsc/react-jsx-dev-runtime"),
@@ -701,7 +714,7 @@ async fn rsc_aliases(
 
                     // Needed to make `react-dom/server` work.
                     "next/dist/compiled/react" => format!("next/dist/compiled/react/index.js"),
-                })
+                });
             }
             _ => {}
         }
diff --git a/packages/next-swc/crates/next-core/src/next_server/context.rs b/packages/next-swc/crates/next-core/src/next_server/context.rs
index 13127c3ebf..9022efc48d 100644
--- a/packages/next-swc/crates/next-core/src/next_server/context.rs
+++ b/packages/next-swc/crates/next-core/src/next_server/context.rs
@@ -18,7 +18,10 @@ use turbopack_binding::{
             free_var_references,
         },
         ecmascript::{references::esm::UrlRewriteBehavior, TreeShakingMode},
-        ecmascript_plugin::transform::directives::client::ClientDirectiveTransformer,
+        ecmascript_plugin::transform::directives::{
+            client::ClientDirectiveTransformer,
+            client_disallowed::ClientDisallowedDirectiveTransformer,
+        },
         node::{
             execution_context::ExecutionContext,
             transforms::postcss::{PostCssConfigLocation, PostCssTransformOptions},
@@ -96,8 +99,14 @@ pub enum ServerContextType {
         app_dir: Vc<FileSystemPath>,
         ecmascript_client_reference_transition_name: Option<Vc<RcStr>>,
     },
-    Middleware,
-    Instrumentation,
+    Middleware {
+        app_dir: Option<Vc<FileSystemPath>>,
+        ecmascript_client_reference_transition_name: Option<Vc<RcStr>>,
+    },
+    Instrumentation {
+        app_dir: Option<Vc<FileSystemPath>>,
+        ecmascript_client_reference_transition_name: Option<Vc<RcStr>>,
+    },
 }
 
 impl ServerContextType {
@@ -108,6 +117,7 @@ impl ServerContextType {
                 | ServerContextType::AppRoute { .. }
                 | ServerContextType::PagesApi { .. }
                 | ServerContextType::Middleware { .. }
+                | ServerContextType::Instrumentation { .. }
         )
     }
 }
@@ -214,7 +224,7 @@ pub async fn get_server_resolve_options_context(
         | ServerContextType::PagesApi { .. }
         | ServerContextType::AppRoute { .. }
         | ServerContextType::Middleware { .. }
-        | ServerContextType::Instrumentation => {
+        | ServerContextType::Instrumentation { .. } => {
             vec![Vc::upcast(module_feature_report_resolve_plugin)]
         }
     };
@@ -264,7 +274,7 @@ pub async fn get_server_resolve_options_context(
         | ServerContextType::AppRSC { .. }
         | ServerContextType::AppRoute { .. }
         | ServerContextType::Middleware { .. }
-        | ServerContextType::Instrumentation => {
+        | ServerContextType::Instrumentation { .. } => {
             before_resolve_plugins.push(Vc::upcast(invalid_client_only_resolve_plugin));
             before_resolve_plugins.push(Vc::upcast(invalid_styled_jsx_client_only_resolve_plugin));
         }
@@ -731,13 +741,46 @@ pub async fn get_server_module_options_context(
                 ..module_options_context
             }
         }
-        ServerContextType::Middleware | ServerContextType::Instrumentation => {
-            let custom_source_transform_rules: Vec<ModuleRule> =
+        ServerContextType::Middleware {
+            app_dir,
+            ecmascript_client_reference_transition_name,
+        }
+        | ServerContextType::Instrumentation {
+            app_dir,
+            ecmascript_client_reference_transition_name,
+        } => {
+            let mut custom_source_transform_rules: Vec<ModuleRule> =
                 vec![styled_components_transform_rule, styled_jsx_transform_rule]
                     .into_iter()
                     .flatten()
                     .collect();
 
+            if let Some(ecmascript_client_reference_transition_name) =
+                ecmascript_client_reference_transition_name
+            {
+                custom_source_transform_rules.push(get_ecma_transform_rule(
+                    Box::new(ClientDirectiveTransformer::new(
+                        ecmascript_client_reference_transition_name,
+                    )),
+                    enable_mdx_rs.is_some(),
+                    true,
+                ));
+            } else {
+                custom_source_transform_rules.push(get_ecma_transform_rule(
+                    Box::new(ClientDisallowedDirectiveTransformer::new(
+                        "next/dist/client/use-client-disallowed.js".to_string(),
+                    )),
+                    enable_mdx_rs.is_some(),
+                    true,
+                ));
+            }
+
+            custom_source_transform_rules.push(
+                get_next_react_server_components_transform_rule(next_config, true, app_dir).await?,
+            );
+
+            internal_custom_rules.extend(custom_source_transform_rules.iter().cloned());
+
             next_server_rules.extend(custom_source_transform_rules);
             next_server_rules.extend(source_transform_rules);
 
diff --git a/packages/next-swc/crates/next-core/src/next_shared/resolve.rs b/packages/next-swc/crates/next-core/src/next_shared/resolve.rs
index c0ced49ee2..9214f07636 100644
--- a/packages/next-swc/crates/next-core/src/next_shared/resolve.rs
+++ b/packages/next-swc/crates/next-core/src/next_shared/resolve.rs
@@ -293,10 +293,10 @@ impl AfterResolvePlugin for NextNodeSharedRuntimeResolvePlugin {
         let resource_request = format!(
             "next/dist/server/route-modules/{}/vendored/contexts/{}.js",
             match self.context {
-                ServerContextType::Pages { .. } => "pages",
                 ServerContextType::AppRoute { .. } => "app-route",
                 ServerContextType::AppSSR { .. } | ServerContextType::AppRSC { .. } => "app-page",
-                _ => "unknown",
+                // Use default pages context for all other contexts.
+                _ => "pages",
             },
             stem
         );
diff --git a/packages/next/src/build/create-compiler-aliases.ts b/packages/next/src/build/create-compiler-aliases.ts
index 6434c208e8..6c065b7874 100644
--- a/packages/next/src/build/create-compiler-aliases.ts
+++ b/packages/next/src/build/create-compiler-aliases.ts
@@ -235,6 +235,16 @@ export function createAppRouterApiAliases(isServerOnlyLayer: boolean) {
   return aliasMap
 }
 
+export function createRSCRendererAliases(bundledReactChannel: string) {
+  return {
+    // react-server-dom-webpack alias
+    'react-server-dom-webpack/client$': `next/dist/compiled/react-server-dom-webpack${bundledReactChannel}/client`,
+    'react-server-dom-webpack/client.edge$': `next/dist/compiled/react-server-dom-webpack${bundledReactChannel}/client.edge`,
+    'react-server-dom-webpack/server.edge$': `next/dist/compiled/react-server-dom-webpack${bundledReactChannel}/server.edge`,
+    'react-server-dom-webpack/server.node$': `next/dist/compiled/react-server-dom-webpack${bundledReactChannel}/server.node`,
+  }
+}
+
 export function createRSCAliases(
   bundledReactChannel: string,
   {
@@ -262,10 +272,7 @@ export function createRSCAliases(
     'react-dom/server.edge$': `next/dist/build/webpack/alias/react-dom-server-edge${bundledReactChannel}.js`,
     'react-dom/server.browser$': `next/dist/build/webpack/alias/react-dom-server-browser${bundledReactChannel}.js`,
     // react-server-dom-webpack alias
-    'react-server-dom-webpack/client$': `next/dist/compiled/react-server-dom-webpack${bundledReactChannel}/client`,
-    'react-server-dom-webpack/client.edge$': `next/dist/compiled/react-server-dom-webpack${bundledReactChannel}/client.edge`,
-    'react-server-dom-webpack/server.edge$': `next/dist/compiled/react-server-dom-webpack${bundledReactChannel}/server.edge`,
-    'react-server-dom-webpack/server.node$': `next/dist/compiled/react-server-dom-webpack${bundledReactChannel}/server.node`,
+    ...createRSCRendererAliases(bundledReactChannel),
   }
 
   if (!isEdgeServer) {
diff --git a/packages/next/src/build/entries.ts b/packages/next/src/build/entries.ts
index cafedb2fb3..8f2d6db974 100644
--- a/packages/next/src/build/entries.ts
+++ b/packages/next/src/build/entries.ts
@@ -838,8 +838,9 @@ export function finalizeEntrypoint({
     }
     case COMPILER_NAMES.edgeServer: {
       return {
-        layer:
-          isMiddlewareFilename(name) || isApi || isInstrumentation
+        layer: isApi
+          ? WEBPACK_LAYERS.api
+          : isMiddlewareFilename(name) || isInstrumentation
             ? WEBPACK_LAYERS.middleware
             : undefined,
         library: { name: ['_ENTRIES', `middleware_[name]`], type: 'assign' },
diff --git a/packages/next/src/build/handle-externals.ts b/packages/next/src/build/handle-externals.ts
index 9ca9421403..5b38dd26e0 100644
--- a/packages/next/src/build/handle-externals.ts
+++ b/packages/next/src/build/handle-externals.ts
@@ -10,7 +10,7 @@ import {
   NODE_ESM_RESOLVE_OPTIONS,
   NODE_RESOLVE_OPTIONS,
 } from './webpack-config'
-import { isWebpackAppLayer, isWebpackServerOnlyLayer } from './utils'
+import { isWebpackBundledLayer, isWebpackServerOnlyLayer } from './utils'
 import { normalizePathSep } from '../shared/lib/page-path/normalize-path-sep'
 const reactPackagesRegex = /^(react|react-dom|react-server-dom-webpack)($|\/)/
 
@@ -174,7 +174,7 @@ export function makeExternalHandler({
       return `commonjs next/dist/lib/import-next-warning`
     }
 
-    const isAppLayer = isWebpackAppLayer(layer)
+    const isAppLayer = isWebpackBundledLayer(layer)
 
     // Relative requires don't need custom resolution, because they
     // are relative to requests we've already resolved here.
diff --git a/packages/next/src/build/utils.ts b/packages/next/src/build/utils.ts
index 73dac41f7b..d46e817d80 100644
--- a/packages/next/src/build/utils.ts
+++ b/packages/next/src/build/utils.ts
@@ -2276,8 +2276,8 @@ export function isWebpackDefaultLayer(
   return layer === null || layer === undefined
 }
 
-export function isWebpackAppLayer(
+export function isWebpackBundledLayer(
   layer: WebpackLayerName | null | undefined
 ): boolean {
-  return Boolean(layer && WEBPACK_LAYERS.GROUP.app.includes(layer as any))
+  return Boolean(layer && WEBPACK_LAYERS.GROUP.bundled.includes(layer as any))
 }
diff --git a/packages/next/src/build/webpack-config.ts b/packages/next/src/build/webpack-config.ts
index 9f4812b1bc..40dfdf4a71 100644
--- a/packages/next/src/build/webpack-config.ts
+++ b/packages/next/src/build/webpack-config.ts
@@ -9,7 +9,7 @@ import { escapeStringRegexp } from '../shared/lib/escape-regexp'
 import { WEBPACK_LAYERS, WEBPACK_RESOURCE_QUERIES } from '../lib/constants'
 import type { WebpackLayerName } from '../lib/constants'
 import {
-  isWebpackAppLayer,
+  isWebpackBundledLayer,
   isWebpackClientOnlyLayer,
   isWebpackDefaultLayer,
   isWebpackServerOnlyLayer,
@@ -81,6 +81,7 @@ import {
   createRSCAliases,
   createNextApiEsmAliases,
   createAppRouterApiAliases,
+  createRSCRendererAliases,
 } from './create-compiler-aliases'
 import { hasCustomExportOutput } from '../export/utils'
 import { CssChunkingPlugin } from './webpack/plugins/css-chunking-plugin'
@@ -529,6 +530,7 @@ export default async function getBaseWebpackConfig(
     : []
 
   const instrumentLayerLoaders = [
+    'next-flight-loader',
     // When using Babel, we will have to add the SWC loader
     // as an additional pass to handle RSC correctly.
     // This will cause some performance overhead but
@@ -538,12 +540,13 @@ export default async function getBaseWebpackConfig(
   ].filter(Boolean)
 
   const middlewareLayerLoaders = [
+    'next-flight-loader',
     // When using Babel, we will have to use SWC to do the optimization
     // for middleware to tree shake the unused default optimized imports like "next/server".
     // This will cause some performance overhead but
     // acceptable as Babel will not be recommended.
     getSwcLoader({
-      serverComponents: false,
+      serverComponents: true,
       bundleLayer: WEBPACK_LAYERS.middleware,
     }),
     babelLoader,
@@ -592,13 +595,12 @@ export default async function getBaseWebpackConfig(
   // Loader for API routes needs to be differently configured as it shouldn't
   // have RSC transpiler enabled, so syntax checks such as invalid imports won't
   // be performed.
-  const apiRoutesLayerLoaders =
-    hasAppDir && useSWCLoader
-      ? getSwcLoader({
-          serverComponents: false,
-          bundleLayer: WEBPACK_LAYERS.api,
-        })
-      : defaultLoaders.babel
+  const apiRoutesLayerLoaders = useSWCLoader
+    ? getSwcLoader({
+        serverComponents: false,
+        bundleLayer: WEBPACK_LAYERS.api,
+      })
+    : defaultLoaders.babel
 
   const pageExtensions = config.pageExtensions
 
@@ -1304,7 +1306,7 @@ export default async function getBaseWebpackConfig(
                 test: /next[\\/]dist[\\/](esm[\\/])?server[\\/]route-modules[\\/]app-page[\\/]module/,
               },
               {
-                issuerLayer: isWebpackAppLayer,
+                issuerLayer: isWebpackBundledLayer,
                 resolve: {
                   alias: createNextApiEsmAliases(),
                 },
@@ -1460,8 +1462,11 @@ export default async function getBaseWebpackConfig(
               ...codeCondition,
               issuerLayer: WEBPACK_LAYERS.api,
               parser: {
-                // Switch back to normal URL handling
-                url: true,
+                // In Node.js, switch back to normal URL handling.
+                // In Edge runtime, we should disable parser.url handling in webpack so URLDependency is not added.
+                // Then there's browser code won't be injected into the edge runtime chunk.
+                // x-ref: https://github.com/webpack/webpack/blob/d9ce3b1f87e63c809d8a19bbd92257d65922e81f/lib/web/JsonpChunkLoadingRuntimeModule.js#L69
+                url: !isEdgeServer,
               },
               use: apiRoutesLayerLoaders,
             },
@@ -1469,11 +1474,23 @@ export default async function getBaseWebpackConfig(
               test: codeCondition.test,
               issuerLayer: WEBPACK_LAYERS.middleware,
               use: middlewareLayerLoaders,
+              resolve: {
+                mainFields: getMainField(compilerType, true),
+                conditionNames: reactServerCondition,
+                // Always use default channels when use installed react
+                alias: createRSCRendererAliases(''),
+              },
             },
             {
               test: codeCondition.test,
               issuerLayer: WEBPACK_LAYERS.instrument,
               use: instrumentLayerLoaders,
+              resolve: {
+                mainFields: getMainField(compilerType, true),
+                conditionNames: reactServerCondition,
+                // Always use default channels when use installed react
+                alias: createRSCRendererAliases(''),
+              },
             },
             ...(hasAppDir
               ? [
diff --git a/packages/next/src/build/webpack/plugins/define-env-plugin.ts b/packages/next/src/build/webpack/plugins/define-env-plugin.ts
index 8e0f53f724..66c6cc90ef 100644
--- a/packages/next/src/build/webpack/plugins/define-env-plugin.ts
+++ b/packages/next/src/build/webpack/plugins/define-env-plugin.ts
@@ -155,6 +155,10 @@ export function getDefineEnv({
              * the runtime they are running with, if it's not using `edge-runtime`
              */
             process.env.NEXT_EDGE_RUNTIME_PROVIDER ?? 'edge-runtime',
+
+          // process should be only { env: {...} } for edge runtime.
+          // For ignore avoid warn on `process.emit` usage but directly omit it.
+          'process.emit': false,
         }),
     'process.turbopack': isTurbopack,
     'process.env.TURBOPACK': isTurbopack,
diff --git a/packages/next/src/build/webpack/plugins/middleware-plugin.ts b/packages/next/src/build/webpack/plugins/middleware-plugin.ts
index 866aff2ae1..e6bdccd6da 100644
--- a/packages/next/src/build/webpack/plugins/middleware-plugin.ts
+++ b/packages/next/src/build/webpack/plugins/middleware-plugin.ts
@@ -28,7 +28,10 @@ import type { Telemetry } from '../../../telemetry/storage'
 import { traceGlobals } from '../../../trace/shared'
 import { EVENT_BUILD_FEATURE_USAGE } from '../../../telemetry/events'
 import { normalizeAppPath } from '../../../shared/lib/router/utils/app-paths'
-import { INSTRUMENTATION_HOOK_FILENAME } from '../../../lib/constants'
+import {
+  INSTRUMENTATION_HOOK_FILENAME,
+  WEBPACK_LAYERS,
+} from '../../../lib/constants'
 import type { CustomRoutes } from '../../../lib/load-custom-routes'
 import { isInterceptionRouteRewrite } from '../../../lib/generate-interception-routes-rewrites'
 import { getDynamicCodeEvaluationError } from './wellknown-errors-plugin/parse-dynamic-code-evaluation-error'
@@ -272,7 +275,8 @@ function buildWebpackError({
 }
 
 function isInMiddlewareLayer(parser: webpack.javascript.JavascriptParser) {
-  return parser.state.module?.layer === 'middleware'
+  const layer = parser.state.module?.layer
+  return layer === WEBPACK_LAYERS.middleware || layer === WEBPACK_LAYERS.api
 }
 
 function isNodeJsModule(moduleName: string) {
@@ -849,7 +853,8 @@ export async function handleWebpackExternalForEdgeRuntime({
   getResolve: () => any
 }) {
   if (
-    contextInfo.issuerLayer === 'middleware' &&
+    (contextInfo.issuerLayer === WEBPACK_LAYERS.middleware ||
+      contextInfo.issuerLayer === WEBPACK_LAYERS.api) &&
     isNodeJsModule(request) &&
     !supportedEdgePolyfills.has(request)
   ) {
diff --git a/packages/next/src/client/use-client-disallowed.ts b/packages/next/src/client/use-client-disallowed.ts
new file mode 100644
index 0000000000..71c898def8
--- /dev/null
+++ b/packages/next/src/client/use-client-disallowed.ts
@@ -0,0 +1,19 @@
+const error = new Proxy(
+  {},
+  {
+    get(_target) {
+      throw new Error(
+        'Using client components is not allowed in this environment.'
+      )
+    },
+  }
+)
+export default new Proxy(
+  {},
+  {
+    get: (_target, p) => {
+      if (p === '__esModule') return true
+      return error
+    },
+  }
+)
diff --git a/packages/next/src/lib/constants.ts b/packages/next/src/lib/constants.ts
index c250a65b4a..c098c8da62 100644
--- a/packages/next/src/lib/constants.ts
+++ b/packages/next/src/lib/constants.ts
@@ -159,6 +159,11 @@ export type WebpackLayerName =
 const WEBPACK_LAYERS = {
   ...WEBPACK_LAYERS_NAMES,
   GROUP: {
+    builtinReact: [
+      WEBPACK_LAYERS_NAMES.reactServerComponents,
+      WEBPACK_LAYERS_NAMES.actionBrowser,
+      WEBPACK_LAYERS_NAMES.appMetadataRoute,
+    ],
     serverOnly: [
       WEBPACK_LAYERS_NAMES.reactServerComponents,
       WEBPACK_LAYERS_NAMES.actionBrowser,
@@ -174,7 +179,7 @@ const WEBPACK_LAYERS = {
       WEBPACK_LAYERS_NAMES.serverSideRendering,
       WEBPACK_LAYERS_NAMES.appPagesBrowser,
     ],
-    app: [
+    bundled: [
       WEBPACK_LAYERS_NAMES.reactServerComponents,
       WEBPACK_LAYERS_NAMES.actionBrowser,
       WEBPACK_LAYERS_NAMES.appMetadataRoute,
diff --git a/test/e2e/module-layer/lib/mixed-lib/shared-module.js b/test/e2e/module-layer/lib/mixed-lib/shared-module.js
new file mode 100644
index 0000000000..89966a446a
--- /dev/null
+++ b/test/e2e/module-layer/lib/mixed-lib/shared-module.js
@@ -0,0 +1,4 @@
+import Link from 'next/link'
+
+export const textValue = 'text-value'
+export const TestLink = Link
diff --git a/test/e2e/module-layer/middleware.js b/test/e2e/module-layer/middleware.js
index 8a4d11761d..51bfdfc909 100644
--- a/test/e2e/module-layer/middleware.js
+++ b/test/e2e/module-layer/middleware.js
@@ -1,11 +1,20 @@
 import 'server-only'
-import React from 'react'
+import * as React from 'react'
 import { NextResponse } from 'next/server'
 // import './lib/mixed-lib'
 
 export function middleware(request) {
-  if (React.useState) {
+  // To avoid webpack ESM exports checking warning
+  const ReactObject = Object(React)
+  if (ReactObject.useState) {
     throw new Error('React.useState should not be defined in server layer')
   }
+
+  if (request.nextUrl.pathname === '/middleware') {
+    return Response.json({
+      React: Object.keys(ReactObject),
+    })
+  }
+
   return NextResponse.next()
 }
diff --git a/test/e2e/module-layer/module-layer.test.ts b/test/e2e/module-layer/module-layer.test.ts
index bf665e1428..8dca3ba952 100644
--- a/test/e2e/module-layer/module-layer.test.ts
+++ b/test/e2e/module-layer/module-layer.test.ts
@@ -2,7 +2,7 @@ import { nextTestSetup } from 'e2e-utils'
 import { getRedboxSource, hasRedbox, retry } from 'next-test-utils'
 
 describe('module layer', () => {
-  const { next, isNextStart, isNextDev, isTurbopack } = nextTestSetup({
+  const { next, isNextStart, isNextDev } = nextTestSetup({
     files: __dirname,
   })
 
@@ -18,8 +18,10 @@ describe('module layer', () => {
       '/app/route',
       '/app/route-edge',
       // pages/api
-      '/api/hello',
-      '/api/hello-edge',
+      '/api/default',
+      '/api/default-edge',
+      '/api/server-only',
+      '/api/server-only-edge',
       '/api/mixed',
     ]
 
@@ -30,6 +32,35 @@ describe('module layer', () => {
       })
     }
 
+    it('should render installed react-server condition for middleware', async () => {
+      const json = await next.fetch('/middleware').then((res) => res.json())
+      expect(json.React).toContain('version') // basic react-server export
+      expect(json.React).not.toContain('useEffect') // no client api export
+    })
+
+    // This is for backward compatibility, don't change react usage in existing pages/api
+    it('should contain client react exports for pages api', async () => {
+      async function verifyReactExports(route, isEdge) {
+        const json = await next.fetch(route).then((res) => res.json())
+        // contain all react-server and default condition exports
+        expect(json.React).toContain('version')
+        expect(json.React).toContain('useEffect')
+
+        // contain react-dom-server default condition exports
+        expect(json.ReactDomServer).toContain('version')
+        expect(json.ReactDomServer).toContain('renderToString')
+        expect(json.ReactDomServer).toContain('renderToStaticMarkup')
+        expect(json.ReactDomServer).toContain(
+          isEdge ? 'renderToReadableStream' : 'renderToPipeableStream'
+        )
+      }
+
+      await verifyReactExports('/api/default', false)
+      await verifyReactExports('/api/default-edge', true)
+      await verifyReactExports('/api/server-only', false)
+      await verifyReactExports('/api/server-only-edge', true)
+    })
+
     if (isNextStart) {
       it('should log the build info properly', async () => {
         const cliOutput = next.cliOutput
@@ -40,7 +71,8 @@ describe('module layer', () => {
         )
         expect(functionsManifest.functions).toContainKeys([
           '/app/route-edge',
-          '/api/hello-edge',
+          '/api/default-edge',
+          '/api/server-only-edge',
           '/app/client-edge',
           '/app/server-edge',
         ])
@@ -52,9 +84,10 @@ describe('module layer', () => {
         )
         expect(middlewareManifest.middleware).toBeTruthy()
         expect(pagesManifest).toContainKeys([
-          '/api/hello-edge',
+          '/api/default-edge',
           '/pages-ssr',
-          '/api/hello',
+          '/api/default',
+          '/api/server-only',
         ])
       })
     }
@@ -81,22 +114,13 @@ describe('module layer', () => {
             .replace("// import './lib/mixed-lib'", "import './lib/mixed-lib'")
         )
 
-        const existingCliOutputLength = next.cliOutput.length
         await retry(async () => {
           expect(await hasRedbox(browser)).toBe(true)
           const source = await getRedboxSource(browser)
           expect(source).toContain(
-            `'client-only' cannot be imported from a Server Component module. It should only be used from a Client Component.`
+            `You're importing a component that imports client-only. It only works in a Client Component but none of its parents are marked with "use client"`
           )
         })
-
-        if (!isTurbopack) {
-          const newCliOutput = next.cliOutput.slice(existingCliOutputLength)
-          expect(newCliOutput).toContain('./middleware.js')
-          expect(newCliOutput).toContain(
-            `'client-only' cannot be imported from a Server Component module. It should only be used from a Client Component`
-          )
-        }
       })
     })
   }
diff --git a/test/e2e/module-layer/pages/api/default-edge.js b/test/e2e/module-layer/pages/api/default-edge.js
new file mode 100644
index 0000000000..f4621f2500
--- /dev/null
+++ b/test/e2e/module-layer/pages/api/default-edge.js
@@ -0,0 +1,11 @@
+import * as ReactDomServer from 'react-dom/server'
+import * as React from 'react'
+
+export default async (_req) => {
+  return Response.json({
+    React: Object.keys(Object(React)),
+    ReactDomServer: Object.keys(Object(ReactDomServer)),
+  })
+}
+
+export const runtime = 'edge'
diff --git a/test/e2e/module-layer/pages/api/default.js b/test/e2e/module-layer/pages/api/default.js
new file mode 100644
index 0000000000..2b13630aa4
--- /dev/null
+++ b/test/e2e/module-layer/pages/api/default.js
@@ -0,0 +1,9 @@
+import * as ReactDomServer from 'react-dom/server'
+import * as React from 'react'
+
+export default async (_req, res) => {
+  return res.json({
+    React: Object.keys(Object(React)),
+    ReactDomServer: Object.keys(Object(ReactDomServer)),
+  })
+}
diff --git a/test/e2e/module-layer/pages/api/hello-edge.js b/test/e2e/module-layer/pages/api/hello-edge.js
deleted file mode 100644
index dce0100296..0000000000
--- a/test/e2e/module-layer/pages/api/hello-edge.js
+++ /dev/null
@@ -1,7 +0,0 @@
-import 'server-only'
-
-export default function handler() {
-  return new Response('pages/api/hello-edge.js:')
-}
-
-export const runtime = 'edge'
diff --git a/test/e2e/module-layer/pages/api/hello.js b/test/e2e/module-layer/pages/api/hello.js
deleted file mode 100644
index d1fe5339d8..0000000000
--- a/test/e2e/module-layer/pages/api/hello.js
+++ /dev/null
@@ -1,5 +0,0 @@
-import 'server-only'
-
-export default function handler(req, res) {
-  return res.send('pages/api/hello.js')
-}
diff --git a/test/e2e/module-layer/pages/api/server-only-edge.js b/test/e2e/module-layer/pages/api/server-only-edge.js
new file mode 100644
index 0000000000..17e682c015
--- /dev/null
+++ b/test/e2e/module-layer/pages/api/server-only-edge.js
@@ -0,0 +1,12 @@
+import 'server-only'
+import * as ReactDomServer from 'react-dom/server'
+import * as React from 'react'
+
+export default async (_req) => {
+  return Response.json({
+    React: Object.keys(Object(React)),
+    ReactDomServer: Object.keys(Object(ReactDomServer)),
+  })
+}
+
+export const runtime = 'edge'
diff --git a/test/e2e/module-layer/pages/api/server-only.js b/test/e2e/module-layer/pages/api/server-only.js
new file mode 100644
index 0000000000..7f276bdf9c
--- /dev/null
+++ b/test/e2e/module-layer/pages/api/server-only.js
@@ -0,0 +1,10 @@
+import 'server-only'
+import * as ReactDomServer from 'react-dom/server'
+import * as React from 'react'
+
+export default async (_req, res) => {
+  return res.json({
+    React: Object.keys(Object(React)),
+    ReactDomServer: Object.keys(Object(ReactDomServer)),
+  })
+}
diff --git a/test/e2e/react-version/app/app/client-edge/page.js b/test/e2e/react-version/app/app/client-edge/page.js
new file mode 100644
index 0000000000..1bb1e68bdc
--- /dev/null
+++ b/test/e2e/react-version/app/app/client-edge/page.js
@@ -0,0 +1,5 @@
+'use client'
+
+export { default } from '../client/page'
+
+export const runtime = 'edge'
diff --git a/test/e2e/react-version/app/app/client/page.js b/test/e2e/react-version/app/app/client/page.js
new file mode 100644
index 0000000000..0aafacbc62
--- /dev/null
+++ b/test/e2e/react-version/app/app/client/page.js
@@ -0,0 +1,7 @@
+'use client'
+
+import { ReactConditionUI } from '../../../lib/react-version'
+
+export default function Page() {
+  return <ReactConditionUI />
+}
diff --git a/test/e2e/react-version/app/app/route-edge/route.js b/test/e2e/react-version/app/app/route-edge/route.js
new file mode 100644
index 0000000000..7db938b384
--- /dev/null
+++ b/test/e2e/react-version/app/app/route-edge/route.js
@@ -0,0 +1,3 @@
+export { GET } from '../route/route'
+
+export const runtime = 'edge'
diff --git a/test/e2e/react-version/app/app/route/route.js b/test/e2e/react-version/app/app/route/route.js
new file mode 100644
index 0000000000..255fb2ffd3
--- /dev/null
+++ b/test/e2e/react-version/app/app/route/route.js
@@ -0,0 +1,5 @@
+import { getReactConditionJson } from '../../../lib/react-version'
+
+export function GET() {
+  return Response.json(getReactConditionJson())
+}
diff --git a/test/e2e/react-version/app/app/server-edge/page.js b/test/e2e/react-version/app/app/server-edge/page.js
new file mode 100644
index 0000000000..d4bb5d67b4
--- /dev/null
+++ b/test/e2e/react-version/app/app/server-edge/page.js
@@ -0,0 +1,3 @@
+export { default } from '../server/page'
+
+export const runtime = 'edge'
diff --git a/test/e2e/react-version/app/app/server/page.js b/test/e2e/react-version/app/app/server/page.js
new file mode 100644
index 0000000000..289dd851aa
--- /dev/null
+++ b/test/e2e/react-version/app/app/server/page.js
@@ -0,0 +1,5 @@
+import { ReactConditionUI } from '../../../lib/react-version'
+
+export default function Page() {
+  return <ReactConditionUI />
+}
diff --git a/test/e2e/react-version/app/layout.js b/test/e2e/react-version/app/layout.js
new file mode 100644
index 0000000000..4ee00a2185
--- /dev/null
+++ b/test/e2e/react-version/app/layout.js
@@ -0,0 +1,7 @@
+export default function RootLayout({ children }) {
+  return (
+    <html lang="en">
+      <body>{children}</body>
+    </html>
+  )
+}
diff --git a/test/e2e/react-version/lib/react-validate.js b/test/e2e/react-version/lib/react-validate.js
new file mode 100644
index 0000000000..0c14777cb0
--- /dev/null
+++ b/test/e2e/react-version/lib/react-validate.js
@@ -0,0 +1,27 @@
+import React from 'react'
+import ReactDOM from 'react-dom'
+
+function getReactConditionByModule(React_) {
+  const React = Object(React_)
+  const isReactServer =
+    React.useState === undefined &&
+    React.useEffect === undefined &&
+    React.version !== undefined &&
+    React.useId !== undefined
+  return isReactServer ? 'react-server' : 'default'
+}
+
+function getReactDomConditionByModule(ReactDOM_) {
+  const ReactDOM = Object(ReactDOM_)
+  const isReactServer =
+    ReactDOM.useFormState === undefined && ReactDOM.preload !== undefined
+  return isReactServer ? 'react-server' : 'default'
+}
+
+export function getReactCondition() {
+  return getReactConditionByModule(React)
+}
+
+export function getReactDomCondition() {
+  return getReactDomConditionByModule(ReactDOM)
+}
diff --git a/test/e2e/react-version/lib/react-version.js b/test/e2e/react-version/lib/react-version.js
new file mode 100644
index 0000000000..74919e2075
--- /dev/null
+++ b/test/e2e/react-version/lib/react-version.js
@@ -0,0 +1,17 @@
+import { getReactCondition, getReactDomCondition } from './react-validate'
+
+export function ReactConditionUI() {
+  return (
+    <div>
+      <p id="react-export-condition">{getReactCondition()}</p>
+      <p id="react-dom-export-condition">{getReactDomCondition()}</p>
+    </div>
+  )
+}
+
+export function getReactConditionJson() {
+  return {
+    react: getReactCondition(),
+    reactDom: getReactDomCondition(),
+  }
+}
diff --git a/test/e2e/react-version/middleware.js b/test/e2e/react-version/middleware.js
new file mode 100644
index 0000000000..48257ff2fa
--- /dev/null
+++ b/test/e2e/react-version/middleware.js
@@ -0,0 +1,10 @@
+import { NextResponse } from 'next/server'
+import { getReactConditionJson } from './lib/react-version'
+
+export function middleware(request) {
+  if (request.nextUrl.pathname === '/middleware') {
+    return Response.json(getReactConditionJson())
+  }
+
+  return NextResponse.next()
+}
diff --git a/test/e2e/react-version/pages/api/pages-api-edge-url-dep.js b/test/e2e/react-version/pages/api/pages-api-edge-url-dep.js
new file mode 100644
index 0000000000..12c4679ba2
--- /dev/null
+++ b/test/e2e/react-version/pages/api/pages-api-edge-url-dep.js
@@ -0,0 +1,13 @@
+import { getReactConditionJson } from '../../lib/react-version'
+
+// Adding URL dependency to edge api, it shouldn't break the build
+console.log(
+  'TEST_URL_DEPENDENCY',
+  import(new URL('./style.css', import.meta.url).href)
+)
+
+export default async (_req) => {
+  return Response.json(getReactConditionJson())
+}
+
+export const runtime = 'experimental-edge'
diff --git a/test/e2e/react-version/pages/api/pages-api-edge.js b/test/e2e/react-version/pages/api/pages-api-edge.js
new file mode 100644
index 0000000000..cceae822c1
--- /dev/null
+++ b/test/e2e/react-version/pages/api/pages-api-edge.js
@@ -0,0 +1,7 @@
+import { getReactConditionJson } from '../../lib/react-version'
+
+export default async (_req) => {
+  return Response.json(getReactConditionJson())
+}
+
+export const runtime = 'experimental-edge'
diff --git a/test/e2e/react-version/pages/api/pages-api.js b/test/e2e/react-version/pages/api/pages-api.js
new file mode 100644
index 0000000000..9ea402cc74
--- /dev/null
+++ b/test/e2e/react-version/pages/api/pages-api.js
@@ -0,0 +1,5 @@
+import { getReactConditionJson } from '../../lib/react-version'
+
+export default async (_req, res) => {
+  return res.json(getReactConditionJson())
+}
diff --git a/test/e2e/react-version/pages/api/style.css b/test/e2e/react-version/pages/api/style.css
new file mode 100644
index 0000000000..a15c877ac0
--- /dev/null
+++ b/test/e2e/react-version/pages/api/style.css
@@ -0,0 +1,3 @@
+.foo {
+  color: red;
+}
diff --git a/test/e2e/react-version/pages/pages-ssr-edge.js b/test/e2e/react-version/pages/pages-ssr-edge.js
new file mode 100644
index 0000000000..907fd5f21a
--- /dev/null
+++ b/test/e2e/react-version/pages/pages-ssr-edge.js
@@ -0,0 +1,9 @@
+import { ReactConditionUI } from '../lib/react-version'
+
+export default function Page() {
+  return <ReactConditionUI />
+}
+
+export const config = {
+  runtime: 'experimental-edge',
+}
diff --git a/test/e2e/react-version/pages/pages-ssr.js b/test/e2e/react-version/pages/pages-ssr.js
new file mode 100644
index 0000000000..5ab9cf1056
--- /dev/null
+++ b/test/e2e/react-version/pages/pages-ssr.js
@@ -0,0 +1,5 @@
+import { ReactConditionUI } from '../lib/react-version'
+
+export default function Page() {
+  return <ReactConditionUI />
+}
diff --git a/test/e2e/react-version/react-version.test.ts b/test/e2e/react-version/react-version.test.ts
new file mode 100644
index 0000000000..00fd3a3a98
--- /dev/null
+++ b/test/e2e/react-version/react-version.test.ts
@@ -0,0 +1,63 @@
+import { nextTestSetup } from 'e2e-utils'
+
+describe('react version', () => {
+  const { next } = nextTestSetup({
+    files: __dirname,
+  })
+
+  it('should use react-server condition for app router server components pages', async () => {
+    const rscPagesRoutes = ['/app/server', '/app/server-edge']
+
+    for (const route of rscPagesRoutes) {
+      const $ = await next.render$(route)
+      expect($('#react-export-condition').text()).toBe('react-server')
+      expect($('#react-dom-export-condition').text()).toBe('react-server')
+    }
+  })
+
+  it('should use react-server condition for app router client components pages', async () => {
+    const rscPagesRoutes = ['/app/client', '/app/client-edge']
+
+    for (const route of rscPagesRoutes) {
+      const $ = await next.render$(route)
+      expect($('#react-export-condition').text()).toBe('default')
+      expect($('#react-dom-export-condition').text()).toBe('default')
+    }
+  })
+
+  it('should use react-server condition for app router custom routes', async () => {
+    const customRoutes = ['/app/route', '/app/route-edge']
+
+    for (const route of customRoutes) {
+      const res = await next.fetch(route)
+      const json = await res.json()
+      expect(json.react).toBe('react-server')
+      expect(json.reactDom).toBe('react-server')
+    }
+  })
+
+  it('should use default react condition for pages router pages', async () => {
+    const pagesRoutes = ['/pages-ssr', '/pages-ssr-edge']
+
+    for (const route of pagesRoutes) {
+      const $ = await next.render$(route)
+      expect($('#react-export-condition').text()).toBe('default')
+      expect($('#react-dom-export-condition').text()).toBe('default')
+    }
+  })
+
+  it('should use default react condition for pages router apis', async () => {
+    const pagesRoutes = [
+      '/api/pages-api',
+      '/api/pages-api-edge',
+      '/api/pages-api-edge-url-dep',
+    ]
+
+    for (const route of pagesRoutes) {
+      const res = await next.fetch(route)
+      const json = await res.json()
+      expect(json.react).toBe('default')
+      expect(json.reactDom).toBe('default')
+    }
+  })
+})
diff --git a/test/e2e/rsc-layers-transform/app/layout.js b/test/e2e/rsc-layers-transform/app/layout.js
new file mode 100644
index 0000000000..750eb927b1
--- /dev/null
+++ b/test/e2e/rsc-layers-transform/app/layout.js
@@ -0,0 +1,7 @@
+export default function Layout({ children }) {
+  return (
+    <html>
+      <body>{children}</body>
+    </html>
+  )
+}
diff --git a/test/e2e/rsc-layers-transform/app/page.js b/test/e2e/rsc-layers-transform/app/page.js
new file mode 100644
index 0000000000..9c4a210081
--- /dev/null
+++ b/test/e2e/rsc-layers-transform/app/page.js
@@ -0,0 +1,3 @@
+export default function Page() {
+  return 'page'
+}
diff --git a/test/e2e/rsc-layers-transform/instrumentation.js b/test/e2e/rsc-layers-transform/instrumentation.js
new file mode 100644
index 0000000000..cff7a8b10b
--- /dev/null
+++ b/test/e2e/rsc-layers-transform/instrumentation.js
@@ -0,0 +1,10 @@
+import React from 'react'
+import { textValue } from './lib/shared-module'
+
+export async function register() {
+  if (Object(React).useState) {
+    throw new Error('instrumentation is not working correctly in server layer')
+  }
+  console.log('instrumentation:register')
+  console.log('instrumentation:text:' + textValue)
+}
diff --git a/test/e2e/rsc-layers-transform/lib/shared-module.js b/test/e2e/rsc-layers-transform/lib/shared-module.js
new file mode 100644
index 0000000000..89966a446a
--- /dev/null
+++ b/test/e2e/rsc-layers-transform/lib/shared-module.js
@@ -0,0 +1,4 @@
+import Link from 'next/link'
+
+export const textValue = 'text-value'
+export const TestLink = Link
diff --git a/test/e2e/rsc-layers-transform/middleware.js b/test/e2e/rsc-layers-transform/middleware.js
new file mode 100644
index 0000000000..96d0427e04
--- /dev/null
+++ b/test/e2e/rsc-layers-transform/middleware.js
@@ -0,0 +1,19 @@
+import { NextResponse } from 'next/server'
+import { textValue, TestLink } from './lib/shared-module'
+
+export function middleware(request) {
+  if (request.nextUrl.pathname === '/middleware') {
+    let testLink
+    try {
+      testLink = TestLink.$$typeof.toString()
+    } catch (e) {
+      testLink = e.message
+    }
+    return Response.json({
+      clientReference: testLink,
+      textValue,
+    })
+  }
+
+  return NextResponse.next()
+}
diff --git a/test/e2e/rsc-layers-transform/next.config.js b/test/e2e/rsc-layers-transform/next.config.js
new file mode 100644
index 0000000000..c4cf84a765
--- /dev/null
+++ b/test/e2e/rsc-layers-transform/next.config.js
@@ -0,0 +1,5 @@
+module.exports = {
+  experimental: {
+    instrumentationHook: true,
+  },
+}
diff --git a/test/e2e/rsc-layers-transform/rsc-layers-transform.test.ts b/test/e2e/rsc-layers-transform/rsc-layers-transform.test.ts
new file mode 100644
index 0000000000..dd1d3ddab5
--- /dev/null
+++ b/test/e2e/rsc-layers-transform/rsc-layers-transform.test.ts
@@ -0,0 +1,22 @@
+import { nextTestSetup } from 'e2e-utils'
+
+describe('rsc layers transform', () => {
+  const { next } = nextTestSetup({
+    files: __dirname,
+  })
+
+  it('should render installed react-server condition for middleware', async () => {
+    const json = await next.fetch('/middleware').then((res) => res.json())
+
+    expect(json).toEqual({
+      textValue: 'text-value',
+      clientReference: 'Symbol(react.client.reference)',
+    })
+  })
+
+  it('should call instrumentation hook without errors', async () => {
+    const output = next.cliOutput
+    expect(output).toContain('instrumentation:register')
+    expect(output).toContain('instrumentation:text:text-value')
+  })
+})